A Canadian businessman who was restricted from operating as a company director in the State following the collapse of a business in Roscrea, Co Tipperary, in 2002, has been jailed in the US for fraud.
The collapse of Miza Ireland (formerly Antigen) saw approximately 250 people lose their jobs and delivered an economic blow to Roscrea from which it has struggled to recover.
"It [the business] had been there since the early 1940s and was a major employment source for Roscrea and its hinterland," said local Fianna Fáil councillor Michael Smith. "It was supposed to grow after it was taken over and when it collapsed it was a massive blow."
Antigen was placed in examinership in 2001 and bought by Canadian company Miza Pharmaceuticals under a scheme of arrangement approved by the courts. However, within a year the business collapsed.
The scheme of arrangement under which the Tipperary business was sold to Miza, a company founded by Canadian businessman Jack Kachkar, was controversial as it involved some creditors being paid prior to others, including banks. However, the courts approved the scheme as it was feared the business would otherwise collapse.
Following the collapse of the business just a year after Miza took it over, the liquidator, Tom Grace, sought the restriction of Kachkar and others from operating as directors of Irish companies.
Mr Grace said in court that while the business owed creditors €17.3 million at the time it was taken over by Kachkar, the debt to creditors was €9 million greater by the time it collapsed.
He also said that sums and assets worth approximately €2.8 million were transferred out of the Roscrea business at a time when it was insolvent.
‘Question of responsibility’
Judge Mary Finlay Geoghegan, in granting Mr Grace’s application, said that on the basis of the facts before the court the issue was not honesty but whether the directors had acted responsibly.
Kachkar subsequently appealed the judgment to the Supreme Court, at a time when he was making a bid to buy soccer club Olympique de Marseille for €115 million. The bid for the club did not succeed, and nor did the appeal.
Last month the now 56-year-old businessman was jailed by a court in Miami, Florida, for 30 years for his part in a fraud that led to the collapse of Westernbank, a Puerto Rico financial institution, with the loss of 1,500 jobs.
The US court ordered Kachkar to pay $103.5 million (€93.2 million) in restitution to Westernbank.
The court decided that Kachkar used fake debts purporting to be owed to his pharmaceutical company, Inyx Inc, to obtain money from Westernbank that was used to prop up Inyx.
The funds were also used to allow Kachkar "live an uber-lavish lifestyle far beyond his legitimate means", US district judge Donald Graham said.
The wire fraud case heard evidence of the money being used to fund a private jet, as well as expensive property, cars and jewellery.
The borrowing from Westernbank by Inyx using bogus assets began as far back as 2005.
The Puerto Rico bank incurred losses of more than $100 million and was closed by regulators in 2010. The bank’s 1,500 employees lost their jobs.
